This paper evaluates the impact of the recently passed JOBS Act on IPO outcomes. A significant number of IPO firms use provisions of this act. For firms taking advantage of the JOBS Act, we find that, relative to a matched set of peer firms, (1) IPO underpricing increases, (2) post IPO liquidity...

This paper examines the impact of the recently passed JOBS Act on the behavior of market participants. Using the JOBS Act - which relaxed mandatory information disclosure requirements - as a natural experiment on firms' choices of the optimal mix of hard, accounting information and textual...

This paper examines the relation between information differences across investors (i.e., information asymmetry) and the cost of capital, and establishes that with perfect competition information asymmetry makes no difference. Instead, a firm's cost of capital is governed solely by the average...

We investigate the association between voluntary disclosure and the risk-related discount investors apply to price. First, we study the association between (endogenous) disclosure choice and the discount in price induced by changes in the underlying model parameters: this is akin to an empirical...

I analyze a manager's decision to disclose private information when the stock market is a source of information for corporate investment-making. A manager with long-term incentives discloses her private information only if it crowds-in informed trading and increases the manager's ability to...

This paper studies how information disclosure affects investment efficiency and investor welfare in a dynamic setting in which a firm makes sequential investments to adjust its capital stock over time. We show that the effects of accounting disclosures on investment efficiency and investor...

Using the Credit Rating Agency Reform Act of 2006, we examine the credibility of mandatory disclosure by credit rating agencies (CRAs) on managerial learning from stock prices. We find an increase in investment-price sensitivity for firms affected by the Act. Consistent with managers relying...

Transparency has become a catchword and in the economic-political debate is often seen as a universal remedy for all sorts of problems. In this paper, we analyze and discuss the meaning and use of the concept of transparency in economic research. We look for common denominators across different...

The practice of U.S. public companies issuing quarterly earnings guidance is coming under increased scrutiny and criticism. We test two competing hypotheses on whether information asymmetry will increase or decrease after quarterly earnings guidance cessation. The first hypothesis,...

The Securities Offering Reform (SOR), promulgated by the U.S. Securities and Exchange Commission (SEC) in 2005, represents a major change in the seasoned equity offering (SEO) process. SOR eases disclosure restrictions and reduces uncertainty regarding disclosures allowed prior to an SEO. The...